Top 5 homebuyer regrets

In life, and in real estate, there are decisions that, if we had them to do over again, we might do x, y or z differently. But all in all, we are not too upset about how things turned out. "C'est la vie," as they say.

Then there are the decisions and actions we actively regret, worrying over their long-term consequences, wishing we could have a cosmic do-over, stewing and ruminating over what we did wrong. (In truth, it's a sign of emotional maturity to see every experience as an education, and to be free from ruminating over even the worst of our regrets. But I digress).

Contrary to popular belief, my experience shows that the vast majority of homebuyers commit what they see as the first type of mistakes, but not those deep, dark regrets. However, those that do have serious regrets can lose many hours of sleep and many thousands of dollars trying to remedy them. Their only gain? Experience and gray hairs.

Here are the top 5 true, deep regrets of homebuyers and some insights for how to prevent them from taking over your own life:

1. Premature buying. This is not at all about timing the market or making sure you get in at the "just-right" moment. There's not much you can or should do about that. But buying before your life or your finances are ready for homeownership is a transgression that ends up causing serious, long-term regrets for those who end up doing it. Premature buying takes several forms, the most common of which includes jumping the gun and buying before you've saved as much as you really need, or before you've paid your debt down to the level you really needed to.

Another pervasive form of premature buying is to buy before you've truly, deeply, seriously run all your own personal financial numbers, which puts you in the position of forced reliance on what the bank, lender or someone else thinks is affordable, which is often wrong.

Similarly, buying because you feel pressure to get in while the market is keeping prices and interest rates low, rather than because you want and can afford a home, is a surefire path to real estate regret.

2. Buying too small of a house. People who buy too large of a home often realize, several years in, that they simply aren't using all of their rooms and many either sell and downsize or find ways to put the extra space they have to better use. People who buy too small of a home, on the other hand, are acutely aware of it from the moment their children start fighting, they find themselves and their energy levels deactivated by clutter or they end up realizing that there is no room at the inn for the family members or friends they'd like to house, short or long term.

Buying too large of a home is potentially wasteful of the money spent maintaining, heating and cooling the place; buying too small a home is uncomfortable and frustrating, sometimes intensely so, on a constant basis -- hence, the regret it can create.

Avoid this regret by starting your house hunt with a visioning exercise: What do you want your home life to look like in 10 years? Who will live with you? Do you entertain or have overnight guests? What activities do you want or need to be able to do there? Do you want to practice yoga, crafts, have kid-sized homework spaces, work at home, collect classic cars or move your parents in? If so, seek to buy a home that can comfortably fit all these people and their activities, even though they might not all exist -- yet.

3. Buying a home you can't truly afford. You might think that one of the top 5 regrets of homebuyers would be buying at the top of the market. But that's not the case -- I know plenty of buyers who bought at the top, paid top dollar and are still upside down on their homes, yet are still happy with their homes because they can well afford the payment and bought homes that will serve their families very well for the very long term (which will allow their home's value to recover).

It is much more problematic to simply overextend yourself on a home -- no matter what the market dynamics are at the time you buy. People who both bought at the top of the market AND overextended themselves made up the large majority of folks who lost homes, as the mortgage gyrations they went through (i.e., taking short-term, interest-only, adjustable-rate mortgages) in order to qualify for the home in the first place also caused them to be utterly unable to sustain the mortgage once the market declined and their mortgages weren't able to be refinanced.

If you can't foresee being able to make the mortgage payment on your home 10 years in the future without refinancing it, that's a sign you might be approaching the unaffordability danger zone.

4. Incompletely resolving co-buyer conflicts. Many co-buyers are couples, but I've also seen parents buy homes with their children, siblings buy homes together and even good friends team up to co-buy a home. Any time there is more than one buyer, there is a chance that the co-buyers will have one or more disconnects in their wants, needs and priorities. Often these are resolved almost effortlessly by the realities of the homes that are on the market (e.g., neither party's dream home turns out to actually exist, or pricing realities require everyone to compromise); other times, people simply work things out like mature individuals, seeking first to understand their co-buyer's position, then working out a compromise that works for everyone involved.

But in still other cases, the conflict is never truly, deeply resolved; even on closing day, one side feels completely misunderstood, or caves in for the sake of avoiding conflict, or someone simply throws a tantrum, insisting that they get their way. In these cases, it's common for the party who feels undermined and trampled on to ruminate on it as they live in the property every single day, ending up with great resentment and anger over the years.

5. Taking on fixing beyond their skill, patience and resource level. It can be heartbreaking to tour one of the many homes on the market that was clearly the subject of a previous owner's fixer-upper dream but was abandoned in the middle of a remodel. Often, these abandonments happen because the owner simply underestimated what the project would take and ran out of time, energy or, most commonly, money to get the remodeling completed. But it's even sadder to tour the home of a frustrated fixer whose owner and family still lives in a half-done, very dysfunctional property, and who are getting more and more disgruntled with their situation every time they make a mortgage payment.